Thoughts on construction law from Christopher G. Hill, Virginia construction lawyer, LEED AP, mediator, and member of the Virginia Legal Elite in Construction Law

Quick Primer on Virginia Mechanic’s Lien Law

Contracts (Photo credit: NobMouse)

If you have spent significant time in the construction business, you have encountered instances where (i) your construction contract has been breached, (ii) you have not been paid, and (iii) you need to file a mechanic’s lien. Some basic business practices, however, will help ensure that your lien rights are maximized and your claim preserved. Consider these points:

The best way to avoid contractual pitfalls is to consult with an attorney knowledgeable in the construction field to assist you in drafting a contract that fits your particular area of the industry and protects your rights. Once your contracts are properly drafted, the enforcement of your lien rights becomes an uncomplicated task.

The Virginia mechanic’s lien statute allows a contractor to file a lien only for unpaid amounts accrued within 150 days of either the date of the lien or the last day of work performed on the project, whichever is earlier. The simplest and most effective way to avoid losing valuable receivables is to apply payments to the oldest invoice first, thus pushing the receivables closer to the end of the project.

Notify any mechanic’s lien agent listed on the building permit and send collection letters at 30, 60 and 90 days from the time you are owed the money. The mechanic’s lien statute requires that you file any memorandum of lien within 90 days of the last day of the last month (though it is often best to just calculate 90 days from your last work) in which you performed work or provided materials. Having a 30-60-90 day system will act as a set of reminders to keep you from missing this important deadline.

Mechanic’s liens can be expensive to enforce. Regardless of the amount of the lien, enforcement involves a circuit court lawsuit against all parties who have an interest in the property on which your construction was performed.

Remember also that a lien is not the sole remedy– a simple breach of contract suit, alone or in concert with the filing of a mechanic’s lien memorandum, may be enough to force payment. The process need not be scary so long as you enter into well drafted contracts, use proper office business procedures, and consult with an attorney experienced in the filing and enforcement of mechanic’s liens to determine the best course of action.

These are just the basics. Remember that your case is unique and the facts can and will change the general considerations.

UPDATE: On July 1, 2013 your mechanic’s lien form will need to be updated.

UPDATE 2: If all goes to plan, on July 1, 2015 contractual, pre-work waivers of lien rights will be void.

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14 Responses to Quick Primer on Virginia Mechanic’s Lien Law

  1. Your recommendations are right on! I know from experience when contractors do not heed your wisdom they unnecessarily place their company and potentially “the project” at risk.

    I agree that every GC and subcontractor should invest in having an Attorney prepare at least the basic contract for their company as you stated. I suggest the minimum extend one step further and owners should also invest in a thorough consult to understand the contract they’ve purchased. Contractors often hesitate on this additional step yet during negotiations unknowingly put dents in risk securities by making changes for the sake of “compromise”.

    Invest in a good contract, invest in knowing that contract, and don’t miss a beat with lien management.

  2. Thanks for the great additional analysis. As a construction lawyer, I can’t agree more. My goal is to be a consultant and avoid Court. I have yet to do it though. Thanks Staci

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